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Published: 11/30/2000

Surge in remodeling helps drive revenues higher at Chase Brass

BY JULIE M. McKINNON
BLADE BUSINESS WRITER

MONTPELIER - Chase Brass & Copper Co., Inc., this year started the final stage of a $92 million project to increase brass rod capacity by a third and, although the U.S. economy is slowing, its top official remains confident about selling the added production.

The building and construction industry is Chase Brass's largest customer, but the rural Williams County company also supplies brass to communications, electronics, and other firms.

Even though housing starts nationwide are softening, homes that are being built are behemoths that need lots of copper plumbing; and remodeling has become a key for business as three of Chase Brass's large customers sell wares to Home Depot, Lowe's, and other retailers, said John Steadman, Chase Brass president and chief operating officer.

“When people go in and remodel, what do they remodel? The kitchen and the bathroom,” he said. “Naturally we're concerned with the outlook for the economy, but we have a real diverse bunch of industries that we serve.”

Not long after starting production in a $30 million foundry in February, the company owned by Chase Industries, Inc., began construction for a $50 million expansion of core manufacturing that will be finished in early 2002. It is adding two heaters to heat brass blocks made in the plant's foundries, another extrusion press to push 10-inch-by-4-foot blocks through dies to reduce their dimensions, a new cooling and pickling line, and two finishing lines.

The 35-year-old plant's expansion started in 1998 with a $12 million addition for three heaters. Chase Brass' three-phase expansion will increase capacity by 100 million pounds - an about 8 per cent increase of the North American supply of 1.1 billion pounds - to 400 million pounds.

Chase Brass has a solid customer base and hopes to take some market share from U.S. and foreign competitors, and an economic slowdown shouldn't last long, Mr. Steadman said.

Demand for Chase Brass's rods softened somewhat in the third quarter after higher interest rates hurt residential construction and remodeling, the parent company said.

Chase Brass had a 1 per cent decrease in brass rod shipment pounds and a 5 per cent jump in sales to $69 million in the third quarter when compared to the same period a year earlier.

Some of Chase Brass's customers are looking to perk up sales, though.

Masco Corp.'s Delta Faucet Co. in Indianapolis is one Chase Brass customer planning to use more of the Montpelier company's products. Delta Faucet has aggressive plans to market products at Home Depot and elsewhere, said Ron Miller, a purchasing agent for the company.

“Retail is certainly where a lot of the domestic growth is,” he said. “We expect to use at least some of the [added] capacity.”

Local machine shops prefer Chase Brass's rods to those made by other mills, an indication of the product's quality, said Bruce Seeger, president of Seeger Metals and Plastics, Inc., a distributor in Toledo.

“They don't want anyone else,” he said. “They're asking for it by name.”

If Chase Brass can deliver a shorter lead time than competitors for brass-rod orders, the company will have another advantage to help capture more market share, Mr. Seeger said. “They can always put a dent in the imports that are brought into the country,” he added.

Mr. Steadman, who praised the plant's 300 employees for their skill, said some production workers will go to Europe next year to get training from manufacturers of machinery that will equip the plant expansion.

Fifteen employees went to Italy last year for a week of training at a foundry similar to the new one at Chase Brass.

The new foundry has eliminated Chase Brass's need to buy brass blocks from European suppliers, which had filled as much as 10 per cent of its needs, Mr. Steadman said.

“It's going very well,” he said. “It's meeting all of our expectations.”



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